HOME    SEARCH    ABOUT US    CONTACT US    HELP   
           
Montana Administrative Register Notice 17-313 No. 1   01/13/2011    
Prev Next

 

BEFORE THE PETROLEUM TANK RELEASE COMPENSATION BOARD

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 17.58.201, 17.58.301, 17.58.311, 17.58.313, 17.58.323, 17.58.325, 17.58.326, 17.58.331, 17.58.332, 17.58.333, 17.58.334, 17.58.335, 17.58.336, 17.58.337, 17.58.340, 17.58.341, 17.58.342, and 17.58.343; the adoption of New Rule I; and the repeal of ARM 17.58.312 and 17.58.339 pertaining to procedural and substantive rules regarding petroleum tank release compensation

)

)

)

)

)

)

)

)

)

)

)

)

NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT, ADOPTION, AND REPEAL

 

(PETROLEUM BOARD)

 

            TO: All Concerned Persons

 

            1. On February 2, 2011, at 10:00 a.m., the Petroleum Tank Release Compensation Board will hold a public hearing in Room 122, 1100 North Last Chance Gulch, Helena, Montana, to consider the proposed amendment, adoption, and repeal of the above-stated rules.

 

            2. The board will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice.  If you require an accommodation, contact Elois Johnson, Paralegal, no later than 5:00 p.m., January 24, 2011, to advise us of the nature of the accommodation that you need. Please contact Elois Johnson at Department of Environmental Quality, P.O. Box 200901, Helena, Montana 59620-0901; phone (406) 444-2630; fax (406) 444-4386; or e-mail ejohnson@mt.gov.

 

            3. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined:

 

            17.58.201 ATTORNEY GENERAL'S MODEL RULES‑‑INCORPORATION AND SUPPLEMENTATION (1)  The board adopts and incorporates by reference the Attorney General's Model Rules 1 through 28 and forms 1 through 23, as set forth in ARM 1.3.101 through 1.3.233 (with the addition noted in (2) of this rule) Organizational and Procedural Rules, ARM 1.3.201, 1.3.202, 1.3.211 through 1.3.224, and 1.3.226 through 1.3.233, and the Secretary of State's Organizational and Procedural Rules, ARM 1.3.101, 1.3.102, 1.3.301, 1.3.302, 1.3.304, 1.3.305, 1.3.307 through 1.3.309, 1.3.311 through 1.3.313, including the sample forms that follow the Attorney General's model rules and the Secretary of State's online template forms referenced in ARM 1.3.301 and found at www.armtemplates.com/, depicting standard boilerplate language for model forms related to rulemaking.

            (2)  The Attorney General's Organizational and Procedural Rules and the Secretary of State's Organizational and Procedural Rules referenced in (1) may be found online at http:www.mtrules.org/.

 

            AUTH:  2-4-201, MCA

            IMP:  2-4-201, MCA

 

            REASON: The board's procedural rule requires updating as a result of amendments to 2-4-202, MCA, and subsequent promulgation and amendment of the model procedural rules in 2008. The proposed amendments install the correct model procedural rules references and are consistent in most respects with the department's model procedural rules.

 

            17.58.301 GUIDELINES FOR PUBLIC PARTICIPATION  (1) remains the same.

            (2) The board shall maintain a mailing list provide access to the interested parties e-mail list link on the board website for persons who wish to know when about the board's is meeting proposed rules and rulemaking proceedings. Any person may add their name and e-mail address to this list by contacting through the interested parties e-mail list link on the board web site.

            (3) The board will mail shall post a copy of its preliminary or tentative agenda to each person on the foregoing mailing list board web site sufficiently in advance of each meeting.

            (4) remains the same.

 

            AUTH: 2-3-103, MCA

            IMP:  2-3-103, MCA

 

            REASON: The proposed amendment is necessary to update the public participation procedures made possible by current technology.

 

            17.58.311 DEFINITIONS Unless the context clearly indicates otherwise, the following definitions, in addition to those in 75-11-302, MCA, apply throughout this chapter:

            (1) remains the same.

            (2) "Actually incurred"," for purposes of reimbursing claims eligible costs caused by a release from a petroleum storage tank, means:

            (a) invoiced charges for goods received or services performed in furtherance of a department-approved  costs actually expended to complete the work required to prepare or implement a corrective action plan, in an amount less than or equal to the corrective action plan budget, as shown by a dated invoice and receipt; or

            (b) payments documented compensation made to a third party in compensation for bodily injury or property damage caused by a release.

            (3) "Automobile"," for purposes of reimbursing claims eligible costs, means a light vehicle as defined at 61-1-139, MCA.

            (4) through (5) remain the same.

            (6) "Bodily injury," as defined in 75-11-302, MCA, will be measured by the board to include detriment that is currently in existence or certain to occur in the future, requires proof to a reasonable degree of medical certainty based on competent evidence as opposed to conjecture or speculation.

            (7) and (8) remain the same.

            (9) "Corrective action plan" means a written plan approved by the department specifying all corrective actions necessary to respond to a release. Each corrective action plan must include the cost of each corrective action specified in the plan.

            (10) "Corrective action plan budget" means the costs listed in the corrective action plan and preliminarily approved in writing by the board staff for obligation by the board pursuant to 75-11-309(5), MCA.

            (9) through (11) remain the same, but are renumbered (11) through (13).

            (12) (14)  "Farm tank" as is defined at ARM 17.56.101.

            (13) remains the same, but is renumbered (15).

            (a) through (c) remain the same.

            (16) "Heating oil" is defined at ARM 17.56.101.

            (17) "Hydraulic lift tank" is defined at ARM 17.56.101.

            (18) "Inactive tank" is defined at ARM 17.56.101.

            (19) "Motor fuel" is defined at ARM 17.56.101.

            (14) (20)  "Necessarily incurred"," for purposes of reimbursing claims eligible costs caused by a release from a petroleum storage tank, means:

            (a) the work contemplated under a department-approved only those costs incurred that are needed to prepare or implement a corrective action plan, when that work addresses a release from a petroleum storage tank in an amount less than or equal to the costs listed in the corrective action plan budget;

            (b) costs incurred to complete the work, approved by the department in writing, not contemplated under an approved corrective action plan, but necessary to respond to an emergency at the site of a release, in order to prevent greater damages more extensive damage or injury than would have occurred without such approval; and or

            (c) remains the same.

            (15) "Property damage," as defined in 75-11-302, MCA, will be measured by the board in terms of diminution of market value, unless the cost of repairing damage is less than the diminution of market value.

            (21) "Noncommercial purposes" is defined at ARM 17.56.101.

            (22) "Oil/water separator" is defined at ARM 17.56.101.

            (23) "Out of service" is defined at ARM 17.56.101.

            (16) (24)  "Reasonably incurred"," for purposes of reimbursing claims eligible costs caused by a release from a petroleum storage tank, means: work required under an approved corrective action plan or necessary to respond to an emergency; or provide compensation to third parties for bodily injury or property damage caused by a release.

            (a) the costs incurred:

            (i) to complete the work required to prepare or implement an approved corrective action plan, in an amount less than or equal to the costs listed in the corrective action plan budget;

            (ii) to complete work, approved by the department in writing, to respond to an emergency at the site of a release in order to prevent more extensive damage or injury than would have occurred without such approval; or

            (iii) in accordance with ARM 17.58.341 and 17.58.342 and that are not presumed to be unreasonable by those rules; or

            (b) compensation paid to third parties for bodily injury or property damage when it is more likely than not that such injury or damage was caused by a release.

            (25) "Release discovery date" means the earliest of:

            (a) the date of discovery by an owner or an operator of any of the conditions set forth in ARM 17.58.502(1), provided that a release is confirmed in any manner provided in ARM 17.58.504 or 17.58.506 after the condition is discovered;

            (b) the date that the owner or operator had actual knowledge of a release; or

            (c) the date that the release is confirmed in any manner provided in ARM 17.58.504.

            (17) (26)  "Residential tank" as is defined at ARM 17.56.101.

            (18) through (19)(b) remain the same, but are renumbered (27) through (28)(b).

            (20) (29)  "Subcontractor" is means a person who performs billable labor in association with a corrective action at the release site when that person is under contract with the contractor/consultant. Subcontractor services do not include delivery or pickup services.

            (21) (30)  "Tank," is as used in 75-11-302(21), MCA, means a fully enclosed stationary device designed to contain an accumulation of petroleum or petroleum products of more than 60 gallons (227L) and constructed of non-earthen materials (e.g., concrete, steel, plastic) that provide structural support.

            (22) (31)  "Vendor" is means a person who provides materials necessary for corrective action at the release site or services away from the release site.

 

            AUTH:  75-11-318, MCA

            IMP:  75-11-318, MCA

 

            REASON: The board is proposing to add the definitions of "heating oil," "hydraulic lift tank," "inactive tank," "motor fuel," "noncommercial purposes," "oil/water separator," and "out of service" because it is called on from time to time to interpret those terms in administering the board's program, and to be consistent with the department's underground storage tank definitions.

            The board proposes to amend the definition of "actually incurred," "necessarily incurred," and "reasonably incurred" to better reflect statutory intent, to conform the definition to current board practice, and for clarity.

            The board is proposing to add the definition of "corrective action plan" because the term is used in several of the board's principal statutes governing costs and reimbursement, and yet it is undefined. The term "corrective action plan budget" is proposed as an addition to the definitions because it is consistent with current board practice, and to facilitate clear communication between the board, owner and operators, consultants, and the department pertaining to allowable costs for corrective actions approved by the department and listed in a department-approved corrective action plan.

            The board is proposing to move the definition of "property damage" to ARM 17.58.337 because the board believes that this is a substantive rule and more than a definition. Moving the definition will provide clarity to the rules governing third-party damages.

            The board is proposing to add the definition of "release discovery date" because the term is undefined and because the discovery date of a release is a pivotal date with respect to the board's determination of eligibility, and also for gauging compliance with time of release cleanup requirements per statute. The proposed definition will provide owners and operators, the department, and the board a clear, fair, and easily applied definition of a concept that heretofore has been somewhat nebulous. The board intends that the adoption of this definition will provide for more fair, consistent, and evenhanded eligibility determinations.

            The definition of "tank" was proposed for amendment to make clear that a tank must be an enclosed device, as opposed to an open device, used for storage or temporary storage of petroleum products. As an example, a device designed to contain petroleum product in which the stored petroleum product is completely surrounded by a steel wall would qualify as a "tank" under this definition, while appurtenances to a petroleum storage tank system such as spill berms or other forms of "open" containment would not qualify as "tanks," even though they may be designed to "contain an accumulation of petroleum products." This amendment is consistent with board practice and precedent, and would also establish a minimum tank size based upon the limitation in the International Fire Code 2009, Chapter 2, which defines a "tank" in part as a vessel containing more than 60 gallons. The proposed amendment to the definition of "tank" is intended to clarify the definition of petroleum storage tank in 75-11-302(21), MCA, and not to conflict with that definition.

            The amendments to the definitions of "actually incurred," "necessarily incurred," and "reasonably incurred," and the new definition of "corrective action plan budget," are all proposed in an effort to formalize a board business practice that will ensure that all eligible costs are actually, reasonably, and necessarily incurred for preparation or implementation of department-approved corrective action plans before a reimbursement payment from the fund is approved, as required by 75-11-309(3)(a), MCA. See also 75-11-309(1)(g)(ii), MCA, ("The board shall review each claim and determine if the claims are actual, reasonable, and necessary costs of responding to the release and implementing the corrective action plan.").

 

            17.58.313 APPLICABLE COPAYMENTS FOR COMMINGLED PETROLEUM STORAGE TANK RELEASES (1) An owner or operator of a site with more than one eligible release from separate petroleum storage tanks and whose plumes have commingled shall be reimbursed for eligible expenses costs caused by each release, as specified in 75‑11-307(4)(b)(i), MCA. The provisions of 75-11-307(4)(b), MCA, shall be applied separately to each release. If there are costs that are incurred when an ineligible release from a petroleum storage tank has commingled with an eligible release from a separate petroleum storage tank, the owner or operator may not be reimbursed without evidence establishing that it is more likely than not that the costs were caused by the eligible release.

            (2) An owner or operator of a site with more than one eligible release from the same petroleum storage tank whose plumes have commingled shall be reimbursed for eligible costs caused by each release, as specified in 75-11-307(4)(b), MCA. The provisions of 75-11-307(4)(b), MCA, shall be applied separately to each such release. If there are costs that are incurred when an ineligible release has commingled with an eligible release from the same petroleum storage tank, the owner or operator may not be reimbursed without evidence establishing that it is more likely than not that the costs were caused by the eligible release.

            (3) A person who seeks reimbursement from the fund at a rate different than that provided in 75-11-307(4)(b)(i), MCA, must prove that it is more likely than not that no leaking petroleum storage tank at the site is eligible under that section.

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-307, MCA

 

            REASON: These proposed amendments are consistent with current board practice and precedent, and are also consistent with statutory authority governing eligibility, which requires that in making eligibility determinations and reimbursing claims, the board must first determine that there has been "a release from a petroleum storage tank[.]" Section 75-11-308(1), MCA; see also 75-11-307(1) and 75-11-309(3)(b)(i), MCA. In other words, eligibility and reimbursement analyses must be conducted on a tank-by-tank basis. The proposed amendments provide much-needed clarity to the board's eligibility analyses in those cases where mixed plumes from differing releases are discovered at a facility or site for which the owner or operator has claimed eligibility. The proposed definition would make explicitly clear that when a commingled plume involves two or more eligible releases, each such release is treated as a separate release with respect to the reimbursement cap and co-pay requirement set forth in 75-11-307(4)(b), MCA. The definition additionally clarifies that when an ineligible release has commingled with an eligible one, no cleanup costs will be reimbursed unless the owner or operator can establish that it is more likely than not that the claimed costs were caused by the eligible release.

 

            17.58.323 VOLUNTARY REGISTRATION (1) and (2) remain the same.

            (3) The board may investigate and consult with other regulatory agencies concerning the information submitted in the forms to confirm the accuracy of the information submitted by the owner or operator. If a regulatory agency has information or the board discovers information that indicates the owner or operator submitted false or inaccurate information, the board may find that the owner or operator is ineligible for reimbursement deny the application.

            (4) If a regulatory agency has reported noncompliance regarding the operation and management of the petroleum storage tank, the board may find that the owner or operator is ineligible for reimbursement deny the application.

            (5) remains the same.

            (6) The board may delegate to the board staff the authority to issue determinations of potential eligibility for reimbursement when that determination is based on prior board decisions and similar material facts, subject to the owner or operator's right to be heard by the board.

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-318, MCA

 

            REASON: The proposed amendments are offered to clarify existing provisions in the rule.

 

            17.58.325 ELIGIBILITY DETERMINATION (1) When a person notifies the department of a release from a petroleum storage tank, the board shall ensure the owner or operator receives the appropriate forms necessary for a determination of eligibility or to receive reimbursement from the board.

            (2) (1)  Upon receipt of the a completed application for eligibility form, the board shall determine eligibility by following the procedures under ARM 17.58.323(3) through (6) in accordance with 75-11-308 and 75-11-309, MCA.

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-309, MCA

 

            REASON: The proposed amendments are offered to make the rule consistent with the board's statutory authority (see 75-11-309(1)(g), (h), and (3), MCA), to clarify existing provisions in the rule, and to make the rule consistent with current practice.

 

            17.58.326  APPLICABLE RULES GOVERNING THE OPERATION AND MANAGEMENT OF PETROLEUM STORAGE TANKS (1) The applicable state rules referenced in 75-11-308(1)(b)(ii) and 75-11-309(1)(b), MCA, are:

            (a) the following provisions of the National Fire Protection Association 1 Uniform Fire Code, (NFPA1/UFC) (2003), a copy of which may be obtained from the National Fire Protection Association, 1 Batterymarch Park, Quincy, MA 02169, or online without cost at www.nfpa.org:

            (i) Section 42.2.3.4.4.3, which states that means must be provided to sound an audible alarm when the liquid level in the tank reaches 90% capacity. Means must be provided either to automatically stop the flow of liquid into the tank when the liquid level in the tank reaches 98% capacity, or to restrict the flow of liquid into the tank to a maximum flow rate of 2.5 gpm when the liquid in the tank reaches 95% of capacity;

            (ii) Section 42.2.3.4.5.2, which states that guard posts or other approved means must be provided to protect tanks that are subject to vehicular damage;

            (iii) Section 42.2.4.2.1, which states that the design, fabrication, assembly, test and inspection of the piping system must meet the requirement of chapter 5 of NFPA1/UFC 30, Flammable and Combustible Liquids Code;

            (iv) Section 42.2.4.2.3, which states that any portion of a piping system that is in contact with the soil must be protected from corrosion in accordance with good engineering practice;

            (v) Section 42.2.5.3.4, which states that dispensing devices must be mounted on a concrete island or must otherwise be protected against collision damage by means acceptable to the authority having jurisdiction. Dispensing devices must be bolted securely in place;

            (vi) Section 42.2.5.5.2, which states that a listed emergency breakaway device designed to retain liquid on both sides of the breakaway point must be installed on each hose dispensing Class I liquids. Such devices must be installed and maintained in accordance with the manufacturers' instructions;

            (vii) Section 42.2.5.7, which states that fuel dispensing systems must be provided with one or more clearly identified emergency shutoff devices or electrical disconnects;

            (viii) Section 66.2.2.1, which states that tanks may be of any shape, size, or type consistent with sound engineering design. Metal tanks must be welded, riveted and caulked, or bolted, or constructed using a combination of these methods; and

            (ix) Section 66.2.3.1.1, which states that tanks must rest on the ground or on foundations made of concrete, masonry, piling or steel. Tank foundations must be designed to minimize the possibility of uneven settling of the tank and to minimize corrosion in any part of the tank resting on the foundation.

            (a) the following provisions of the International Fire Code (IFC 2009) are applicable to aboveground storage tanks. A copy of the code may be obtained from the International Code Council, 4051 West Flossmoor Road, Country Club Hills, IL 60478-5795, or online with cost at www.iccsafe.org:

            (i) 312.1 Vehicle impact protection shall be provided by posts that comply with Section 312.2 or by other approved physical barriers that comply with Section 312.3;

            (ii) 2203.2 An approved, clearly identified, and readily accessible emergency disconnect switch shall be provided at an approved location to stop the transfer of fuel to the fuel dispensers in the event of a fuel spill or other emergency. An emergency disconnect switch for exterior fuel dispensers shall be located within 100 feet of, but not less than 20 feet from, the fuel dispensers;

            (iii) 2206.7.3 Dispensing devices, except those installed on top of a protected aboveground tank that qualifies as vehicle-impact resistant, shall be protected against physical damage by mounting on a concrete island six inches or more in height;

            (iv) 2206.7.5.1 Dispensing hoses for Class I and II liquids shall be equipped with a listed emergency breakaway device designed to retain liquid on both sides of a breakaway point. Such devices shall be installed and maintained in accordance with the manufacturer's instructions. Where hoses are attached to hose-retrieving mechanisms, the emergency breakaway device shall be located between the hose nozzle and the point of attachment of the hose-retrieval mechanism to the hose;

            (v) 2704.2.2.4 Secondary containment for outdoor storage areas shall be designed to contain a spill from the largest vessel. If the area is open to rainfall, secondary containment shall be designed to include the volume of a 24-hour rainfall as determined by a 25-year storm and provisions shall be made to drain accumulations of ground water and rain water. (In Montana the volume of a 24-hour rainfall as determined by a 25-year storm does not exceed 4.6 inches of freeboard.); and

            (vi) 3404.2.9.7.6 Aboveground storage tanks shall not be filled in excess of 95 percent their capacity. No later than December 31, 2013, tanks must comply with one of the following requirements:

            (A) an overfill prevention system shall be provided for each tank. During tank-filling operations, the system shall provide an independent means of notifying the person filling the tank that the fluid level has reached 90 percent of tank capacity or by providing an audible or visual alarm signal, or providing a tank level gauge marked at 90 percent of tank capacity; or

            (B) an impermeable secondary containment shall be provided for each tank. The tank shall have secondary containment, designed in accordance with 2704.2.2.4 of International Fire Code that is impermeable to petroleum;

            (b) the following provisions of the National Fire Protection Association Uniform Fire Code, Flammable and Combustible Liquids code (NFPA 30) (2008) are applicable to aboveground storage tanks. A copy of the Code may be obtained from the National Fire Protection Association, 1 Batterymarch Park, Quincy, MA 02169, or online at www.nfpa.org:

            (i) 21.3.1 Tanks shall be permitted to be of any shape, size, or type consistent with recognized engineering standards. Metal tanks shall be welded, riveted and caulked, bolted, or constructed using a combination of these methods;

            (ii) 22.5.2.1 Tanks shall rest on the ground or on foundations made of concrete, masonry, piling, or steel;

            (iii) 22.5.2.2 Tank foundations shall be designed to minimize the possibility of uneven settling of the tank and to minimize corrosion in any part of the tank resting on the foundation;

            (iv) 27.3.2 Piping systems shall be maintained liquidtight. A piping system that has leaks that constitute a hazard shall be emptied of liquid or repaired in a manner acceptable to the authority having jurisdiction;

            (v) 27.5.1.1 Joints shall be made liquidtight and shall be welded, flanged, threaded, or mechanically attached;

            (vi) 27.5.1.3 Threaded joints shall be made with a suitable thread sealant or lubricant; and

            (vii) 27.6.4 Aboveground piping systems that are subject to external corrosion shall be suitably protected;

            (c) the following provisions of the National Fire Protection Association Uniform Fire code, Code for Motor Fuel Dispensing Facilities and Repair Garages (NFPA 30A) (2008) are applicable to aboveground storage tanks. A copy of the Code may be obtained from the National Fire Protection Association, 1 Batterymarch Park, Quincy, MCA 02169, or online with cost at www.nfpa.org:

            (i) 4.3.8 Any portion of a tank or its piping that is in contact with the soil shall have properly engineered, installed and maintained corrosion protection that meets the requirements of 21.4.5 of NFPA 30;

            (ii) 5.2.3 Any portion of a piping system that is in contact with the soil shall be protected from corrosion in accordance with good engineering practice; and

            (iii) 6.3.4 Dispensing devices shall be mounted on a concrete island or shall otherwise be protected against collision damage by means acceptable to the authority having jurisdiction. Dispensing devices shall be securely bolted in place. Dispensing devices shall be installed in accordance with the manufacturers' instructions;

            (d) the following provisions of the National Fire Protection Association Uniform Fire Code, Standard for the Installation of Oil-burning Equipment (NFPA 31) (2006) are applicable to aboveground storage tanks attached to burners. A copy of the Code may be obtained from the National Fire Protection Association, 1 Batterymarch Park Quincy, MA 02169, or online at www.nfpa.org:

            (i) 7.2.7.1 Metal tanks shall be welded or brazed or constructed using a combination of these methods;

            (ii) 7.3.1 Tanks shall rest on the ground or on foundations made of concrete, masonry, piling, or steel;

            (iii) 7.3.2 Tank foundations shall be designed to minimize the possibility of uneven settling and to minimize corrosion in any part of the tank resting on the foundation;

            (iv) 7.3.3.1 Single wood timber supports (not cribbing), laid horizontally, shall be permitted to be used for outside aboveground tanks if the supports are less than 12 inches high at their lowest point;

            (v) 7.9.4 Outside aboveground tanks and their appurtenances and supports shall be protected from external corrosion;

            (vi) 7.9.7 Each oil burner supply line connected to the gravity feed connection of the supply tank shall be provided with a shutoff valve at the tank;

            (vii) 7.12.5 Each tank shall be maintained liquidtight;

            (viii) 7.13.1 If an oil storage tank is permanently removed from service, for whatever reason, it shall be emptied of all contents;

            (ix) 7.13.2 If an oil storage tank is temporarily removed from service, for whatever reason, it shall be emptied of all contents;

            (x) 8.2.9 Piping shall meet the following criteria:

            (A) Piping shall be substantially supported and protected against physical damage; and

            (B) Piping shall be protected against corrosion; and

            (xi) 8.2.12 Piping shall be maintained liquidtight;

            (e) 40 CFR Section 112.3, to the extent that this regulation requires an owner or operator to prepare and implement a Spill Prevention, Control, and Countermeasure Plan, is applicable to all petroleum storage tanks; and

            (b) (f)  the following requirements in ARM Title 17, chapter 56 are applicable to underground storage tanks:

            (i) through (iii) remain the same.

            (iv) the testing, monitoring, and recordkeeping requirements identified contained in (1)(b)(ii) subchapter 3 and (iii) subchapter 4;

            (v) the release reporting, initial response, and corrective action requirements identified contained in subchapters 5 and 6; and

            (vi) remains the same.

            (2) An owner or operator shall be considered in compliance with the requirements of (1)(b)(f)(i) through (iv), if the owner's underground storage tank, as defined in 75-11-503, MCA, has one of the following permits issued by the department in accordance with 75-11-509, MCA:

            (a) a valid operating permit as provided in 75-11-509(8), MCA; or

            (b) a valid conditional permit, one-time fill, or emergency operating permit as provided in ARM 17.56.310.

 

            AUTH: 75-11-318, 75-11-319, MCA

            IMP:  75-11-308, MCA

 

            REASON: The proposed amendments to ARM 17.58.326(1)(a) through (d) are necessary because of the adoption by the Department of Justice, Fire Prevention and Investigation Section (State Fire Marshal) of the 2009 International Fire Code, the National Fire Protection Association Uniform Fire Code, Flammable and Combustible Liquids Code, the National Fire Protection Association Uniform Fire Code, Code for Motor Fuel Dispensing Facilities and Repair Garages, and the National Fire Protection Association Uniform Fire Code, Standard for the Installation of Oil-burning Equipment, and because of the repeal by the State Fire Marshal of the referenced sections of the Uniform Fire Code.

            The proposed amendments also change the structure of ARM 17.58.326 to make explicitly clear which state and federal rules apply to each of several kinds of petroleum storage tanks involved in the reimbursement program administered by the board: aboveground storage tanks, underground storage tanks, and aboveground storage tanks attached to burners.

            The proposed addition of (1)(e) relating to compliance with 40 CFR 112.3 is made to ensure that those owners and operators required by 40 CFR Part 112 to have and implement a Spill Prevention Control and Countermeasures Plan have done so. Under this proposed amendment, an owner or operator who does not comply with all of the requirements of 40 CFR 112.3 would not be eligible.  The proposed addition is consistent with the board's regulatory authority to determine which federal rules pertain to the prevention and mitigation of a petroleum release from a petroleum storage tank.

 

            17.58.331 ASSENT TO AUDIT (1) remains the same.

            (2) The owner or operator shall obtain submit the assent on a form provided by the board. The form may must be executed by the contractor, consultant, subcontractor, or vendor before or after the work is completed the board approves reimbursement.

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-309, MCA

 

            REASON: The proposed amendments are offered to clarify existing provisions in the rule.

 

            17.58.332 INSURANCE COVERAGE; THIRD-PARTY LIABILITY; INVESTIGATION; DISCLOSURE; SUBROGATION; COORDINATION OF BENEFITS (1) Prior to receiving payment for any claim for reimbursement, an owner or operator who is determined to be eligible under 75-11-308, MCA shall thoroughly investigate the existence of any policy of insurance or other similar instrument or document which that may indicate insurance coverage for some or all of the eligible costs arising from a release.  At a minimum, this investigation must include:

            (a) complete review of the present owner's and operator's records; and

            (b) the insurance records of the owner or operator in the possession of the insurance company or its agents or brokers; and

            (c) where available, the records of prior owners or operators and others who may have information (if not policies) concerning insurance coverage, including insurance policies; and

            (d) any insurance records, including policies, in the possession or control of the owner or operator that belong to third parties identified pursuant to (2).

            (2) and (3) remain the same.

            (4) Owners or operators seeking reimbursement for eligible costs shall disclose to the board, on a form provided by the board, when the first claim for reimbursement is submitted the results of the owner's or operator's investigations undertaken pursuant to (1) and (2).  Together with the completed form, the owner or operator must may be requested to provide copies of any policy of insurance, or any other evidence that may indicate insurance coverage for some or all of the eligible costs, including any documents identified or discovered as a result of the investigations undertaken pursuant to (1) and (2). Such evidence of insurance includes, but is not limited to, cancelled checks from or to insurance companies, letters to and from insurance companies or their agents or brokers, or policies or declaration sheets indicating extent of coverage.  Narrative information from previous owners or operators concerning possible coverage shall must be submitted in writing along with the form.  The disclosure must contain current information as of the date of the release as well as all available historic insurance information from the date of the facility's first use of petroleum storage tanks. Where applicable, this disclosure must also contain the identity of any third party who may be liable for the eligible costs sought to be reimbursed together with an explanation of the basis of liability and any supporting documentation indicating insurance coverage that third parties may have.

            (5) To the extent the board may reimburse or has reimbursed owners or operators for eligible costs, the board has a subrogation claim against insurance carriers whose policies cover the reimbursed costs and against other third parties whose acts or omissions render them otherwise liable for the reimbursed costs. An owner or operator who accepts reimbursement for costs subrogates his rights to the board as against such insurance carriers and other third parties to the extent of the accepted reimbursed costs. An owner or operator, prior to receiving any reimbursement of eligible costs, must agree on a form provided by the board, to subrogate its claims to the board to the extent of the accepted reimbursed costs.

            (6) remains the same.

            (7) Reimbursement of claims by the board may be delayed by the board pending submission of any form or information referenced in this rule. If it appears to the board that a party has previously reimbursed an owner or operator for eligible costs, the board may withhold reimbursement of claims from that owner or operator pending a determination by the board of what eligible costs, if any, remain to be reimbursed.

 

            AUTH:  75-11-318, MCA

            IMP:  75-11-309, MCA

 

            REASON: The proposed amendments are offered to clarify existing provisions in the rule and to advance the board's adopted policy of seeking payment or subrogation with respect to eligible costs that are covered by an owner or operator's policy of insurance.

 

            17.58.333 DESIGNATION OF REPRESENTATIVE (1) Owners or operators desiring to designate another person to receive reimbursement in their stead under the Act may do so by submitting the appropriate form provided by the board.

 

            AUTH:  75-11-318, MCA

            IMP:  75-11-307, 75-11-307(3), MCA

 

            REASON: The proposed amendments are offered to clarify that there is an assignment of rights to the designee and the designee can stand in no better position than an owner or operator.

 

            17.58.334 APPLICATION FOR REIMBURSEMENT OF CLAIMS FOR REIMBURSEMENT (1) Upon completion of any aspect of task or subtask identified in an approved corrective action plan, the owner or operator, or a remediation contractor acting on behalf of an the owner or operator, may submit the claim to the board on a form provided by the board.

            (2) If the claim is submitted by a person other than the owner or operator, tThe claim form must include all the information required by the board's claim form, and a certification, verified by a notary public, that the individual signing the claim form is the owner or operator or is authorized to represent the owner or operator and that the statements in the claim form are true to the best of the signer's knowledge.

            (3) remains the same.

            (4) The individual that signed the claim can request in writing that any incomplete or insufficiently documented costs be withdrawn from the claim. Withdrawn costs may be submitted at a later date on a new claim form. Costs that are withdrawn and later submitted will be processed as a new claim.

            (5) The minimum claim value may not be less than $500 except:

            (a) when a claim includes only utility bills or laboratory invoices the minimum is reduced to $100;

            (b) when the five-year limitation period set forth in 75-11-307(2)(i), MCA, will expire before a total of $500 in cleanup costs will be accrued;

            (c) when the claim is the final claim for a resolved release; and

            (d) when specific circumstances warrant, additional exceptions may be permitted.

            (6) When submitting an invoice to be divided among multiple releases, the invoice must be equal to or in excess of $500.

 

            AUTH:  75-11-318, MCA

            IMP:  75-11-309, MCA

            REASON: The proposed amendment is necessary to clarify existing provisions in the rule, and to make explicit that owners and operators must submit all information required by the board relating to a claim for reimbursement. The minimum claim value amendment is proposed by the board to lower the administrative costs associated with processing claims for reimbursement. The board has imposed minimum claim limits since April 1998, and the $500 dollar limit has been a public board policy since January 1, 2009.

 

            17.58.335 APPLICATION FOR GUARANTEE OF REIMBURSEMENT OF FUTURE OR UNAPPROVED EXPENDITURES (1) Whenever an owner or operator requests the board to guarantee reimbursement for eligible costs not yet approved by the board, or including estimated costs not yet incurred, the board will may issue the requested guarantee, with no specific dollar amount, if it is able to make the necessary findings under (2).

            (2) The board must find, before guaranteeing reimbursement of future or unapproved expenditures, that the release, the petroleum storage tank, and the owner or operator are each is eligible for reimbursement pursuant to 75-11-308(1), MCA, and that the expenditure or proposed expenditure would be of a type necessary in order to implement an approved corrective action plan or to pay eligible third-party damage claims any estimated eligible cost not yet incurred is one that is reasonably certain to occur.

            (3) In guaranteeing reimbursement of an estimated eligible cost not yet incurred, the board shall include a provision within the guarantee that the reimbursement is subject to adjustment in conformity with 75-11-309(3), MCA, after the cost has been incurred.

            (3) remains the same, but is renumbered (4).

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-309, MCA

 

            REASON: The proposed amendment is necessary to clarify procedures pertaining to the guarantee of reimbursement of future expenditures not yet incurred, and to make explicit that the rule does not affect the board's duty to make the determinations required by 75-11-309(3), MCA.

 

            17.58.336 REVIEW AND DETERMINATION OF CLAIMS FOR REIMBURSEMENT  (1) The board must may not approve a claim for reimbursement unless the owner or operator has submitted a completed application for eligibility and the board has determined that the owner or operator is eligible in accordance with 75-11-308, MCA.

            (2) Upon receipt of a claim for reimbursement for corrective action costs the board staff shall determine if the claim form is complete. The board staff shall promptly advise the owner or operator, or a remediation contractor acting on behalf of an owner or operator, of any incompleteness or deficiency which that appears on the claim form. The final review may be suspended pending the submission of additional information by the owner or operator, or a remediation contractor acting on behalf of an owner or operator.

            (3) Claim forms that have been reviewed as complete at least 60 days prior to a scheduled board meeting will normally be considered by the board at that meeting. The reimbursement of claims for which authority to reimburse has been delegated under (4), is not subject to this procedure. The agenda for consideration of claims at board meetings must follow the order in which claim forms were reviewed as complete and which that are not reimbursed under (4).

            (4) remains the same.

            (5) The recommendations of the board staff shall must be mailed to each board member and to the person submitting the claim at least seven days prior to a board meeting which that is scheduled to consider the claim.

            (6) The owner or operator may appear before the board and make a statement regarding the claim and the board staff's recommendations. Any other interested party may also make a statement. The board may establish a fair and reasonable limit on the time allowed for oral presentations. The board shall thereafter consider the claim and, upon making the determinations required by 75-11-309(3), MCA, may grant it in whole, in such part as may to the board seem proper, or may deny the claim.  Reasons for partial or total denials or disallowed expenses must be stated in the claim reimbursement summary contained in the file, and must be mailed to the owner or operator within ten days of the board's decision. The minutes of a board meeting must reflect the sequence of actions taken on claims.

            (7) through (7)(e)(v) remain the same.

            (8) An owner or operator dissatisfied with the denial or disallowance of all or any part of the claim may request a formal hearing. This request, with a specification of the grounds for disagreement with the board's decision, must be filed in writing with the board within 15 days of the date upon which the board provides written notice to the owner or operator of the board's decision. Upon receiving such request, the presiding officer of the board may appoint a hearing examiner to supervise any discovery and prehearing matters and to conduct the hearing, in accordance with ARM 17.58.201.

            (9) remains the same, but is renumbered (8).

 

            AUTH75-11-318, MCA

            IMP:  75-11-309, MCA

 

            REASON: The proposed amendments are offered for clarity, and because the procedures for notice and hearing have been superseded by 75-11-309(4), MCA (2009).

 

            17.58.337 THIRD-PARTY DAMAGES: PARTICIPATION IN ACTIONS AND REVIEW OF SETTLEMENTS (1) Any owner or operator who is sued for damages resulting from a release shall notify the board of the suit in writing within one week 15 days of being served with a summons and complaint. Within 45 days of being served by the summons and complaint, Tthe owner or operator shall also:

            (a)  advise the board in writing if any insurer is defending him the owner or operator, and if so the name of such insurer;

            (b) provide the board with a complete copy of any insurance policy covering any part of the release or the damages resulting from the release, including all addendums, riders, and endorsements; and

            (c) provide the board with a copy of the summons, complaint, and any answer or answers to the complaint.

            (2) Any owner or operator who, prior to litigation, is advised of a claim by a third party, or enters into negotiations with a third party who claims to have been damaged by a release, or who receives a demand for payment of damages to a third party who claims to have been damaged by a release, shall notify the board of such claim, demand, or negotiations within 30 days, and at that time shall provide the board with a copy of any such claim, demand, or negotiations that have been reduced to writing.

            (3) In addition to the notice requirements of (1) and (2), the owner or operator shall provide the board with status reports once every three months after the notice is given, setting forth the status of investigation, discovery, motion practice, and negotiations for settlement.

            (3) (4)  The board may review the conduct of any such litigation lawsuit or claim, and any negotiation to settle the lawsuit or claim, and may review any pleadings, discovery, investigation, and papers documenting settlement, or negotiations for settlement, of the suit. The owner or operator shall provide copies of any record or document requested by the board to assist the board in its review pursuant to this section. The board will not assume any legal costs incurred by the defendant owner or operator, but may appear and participate in discovery or trial proceedings or settlement negotiations which that bear on the determination of a third party's claim for plaintiff's damages caused by the release. If the parties wish to employ a judge pro tempore under the provisions of 3-5-113, MCA, or a settlement mediator, and consult with the board in the selection process, the board will consider may participating participate in the compensation of the judge pro tempore or settlement mediator.

            (5) Unless the board has been provided with a judgment or an executed settlement agreement that has finally determined an owner or operator's liability to a third party for payment of damages caused by a release, the board may require that a third party claiming such injury to property or person obtain at their own expense and provide to the board in writing a property appraisal or report of medical examination. Such appraisals or examinations are more likely to be required if the owner or operator has not kept the board apprised of the course of litigation or settlement negotiations as required under this rule. If the owner or operator does not keep the board apprised of the course of litigation or settlement negotiations as required by this rule, the board may refuse to reimburse any portion of a settlement or judgment pursuant to this section, and the board may deduct from any reimbursement owed its costs for hiring an independent physician, property appraiser, or claims adjuster under this rule.

            (4) (6)  The board may review any settlement papers or negotiations, including confidential settlement mediations or conferences, for the purpose of determining the dollar amount of bodily injury or property damages actually, necessarily, and reasonably incurred by third parties which, if required to be paid by the defendant owner or operator, would be considered eligible costs caused by a release, provided that the board shall comply with any confidentiality requirements imposed by the court or the mediator, unless there is a compelling state interest to do otherwise.

            (7) "Property damage," as defined in 75-11-302, MCA, will be measured by the board in terms of diminution of market value, unless the costs of repairing damage are less than the diminution of market value.

            (8) Failure to comply with any provision of this rule shall be considered noncompliance subject to 75-11-309(3)(b)(ii), MCA.

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-309(1)(g), MCA

 

            REASON: The amendments are required to clarify the board's procedure with respect to third-party claims, particularly with respect to prompt and early notice of claims to the board, which experience has shown is critical to meaningful participation by the board. The amendments also clarify requirements relating to claim documentation and verification. None of the proposed amendments affect the board's subrogation rights. See Reason for amendment to ARM 17.58.311 for addition of new (7).

 

            17.58.340 THIRD-PARTY DAMAGES: REIMBURSEMENT DOCUMENTATION (1)  For cases in which the board received notice as required in ARM 17.58.337, Aan owner or operator's claim for reimbursement of payments for third-party damages pursuant to a judgment entered in a court shall include copies of the notice of entry of judgment, abstract of costs, and a declaration:

            (a) that the case has been concluded, including appeal, if any; and

            (b)  of the fees paid by the defendant owner or operator to each attorney who appeared in the proceeding.

            (2)  For cases in which the board received notice as required in ARM 17.58.337, Aan owner or operator's claim for reimbursement of payments for third-party damages made by agreement in settlement of litigation or a claim shall include copies of the fully executed settlement agreement and such supporting documents as may be required under (4) ARM 17.58.337.

            (3) An owner or operator's payments for third-party damages made by agreement without reference to litigation shall include copies of the settlement agreement and such supporting documents as may be required under (4).

            (4) The board may require a third party claiming bodily injuries to be examined by a physician and the physician's report submitted to the board. The board may require a third party claiming property damage to allow a property appraiser or claims adjuster retained by the board to enter upon the property, inspect it, and report to the board. Such examinations are more likely to be required if the owner or operator has not kept the board apprised of the course of litigation or settlement negotiations as required under ARM 17.58.337. If the owner or operator does not keep the board apprised of the course of litigation or settlement negotiations as required under ARM 17.58.337, the board may refuse to reimburse any portion of a settlement or judgment under the actual, necessary and reasonable standards applied by the board to all expenditures.

            (5) (3)  The board shall require a listing of amounts attributed to compensation for property damage, bodily injury, or fees, costs, and any other aspect of damage resulting from paid to a third part pursuant to a settlement or judgment described in (1) or (2).

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-309, MCA

 

            REASON: The proposed amendments provide much-needed clarification with respect to the board's administration of third-party claims pursuant to 75-11-307(1) and (2), MCA. The amendments emphasize and complement the early notice and documentation requirements of ARM 17.58.337. The proposed amendment to (3) makes clear that the owner or operator must provide the board with a list of the kinds of damages paid to a third party, and the dollar amount for each such kind of damage. For example, in the case of a third-party property damage claim that was reduced to a judgment, the owner or operator would be required to list each specific payment made to the third party for the property damage, for attorney fees (if any), and for costs (if any). None of the proposed amendments affect the board's subrogation rights.

 

            17.58.341 CONSULTANT LABOR CODES, TITLES, AND DUTIES REIMBURSABLE COSTS (1) Claims by an owner or operator for services provided by a consultant/contractor, or subcontractor, including services of its employees, must be categorized by labor into standard codes according to the list of codes maintained by the board. This requirement does not apply to any service provided by an individual or remediation activity that does not closely approximate one of the standard categories in the board's list of codes.

            (2) A consultant/contractor/subcontractor may file with the board, and amend, not more than once a year (unless further amendment is approved by the board staff), the labor and equipment hourly rates at which and remediation supply costs it bills clients in Montana for the remediation services described in the board's fee schedule list reimbursed from the fund.  The Rrate schedules and amendments must be maintained in confidence by and accessible only to the board staff, as the consultant's expectation of privacy is reasonable and outweighs the merits of public disclosure.

            (3)(a) The board staff shall calculate the industry standard once a year after receipt of rate labor, equipment, and material schedules from companies whose invoices the board frequently reviews and which that have been filed in a number sufficient for a meaningful statistical analysis. In calculating the industry standard, the board staff shall compute a range of allowable rates for each code listed in the board's consultant/contractor code list, which will be the mean rate for each code plus the standard deviation, not to exceed 10% of that mean. The board staff shall then notify each filing firm whether its rates exceed the range of allowable rates, and if so, by how much. The amount by which a consultant's rate for a particular code exceeds the range of allowable rates will be presumed unreasonable.

            (b) remains the same, but is renumbered (4).

            (4) remains the same, but is renumbered (5).

            (5) (6)  An owner or operator or consultant/contractor, or subcontractor may overcome the Any presumption that a rate is unreasonable in this rule may be overcome by presenting clear and convincing evidence to the board as provided under that the presumption should not apply, in accordance with the procedure set forth in ARM 17.58.336(6).

            (6) (7)  Copies of the list, which establishes categories and codes of consultant/contractor/subcontractor services, may be obtained from the board. The list must explain the typical duties to be performed. The consultant/contractor/ subcontractor must be reimbursed labor costs billed on a time basis, and hourly labor costs for personnel time may not be for more than the minimum appropriate level of skill needed to perform a particular task.

            (8) The board staff shall calculate the reasonable cost for department standard plans and standard reports and board standard remediation tasks once a year from requested costs received from companies in a quantity sufficient for a meaningful statistical analysis. The calculation must use the requested costs from the prior five years. In calculating the reasonable costs, the board staff shall compute a range of allowable costs for each standard document in the department's standard corrective action plans and reports lists and board tasks, which will be the mean rate for each standard plus the standard deviation, not to exceed 10% of that mean. The board staff shall then publish the reasonable cost reimbursement for the standard plans and reports on the board web site. The amount by which a consultant claim for a particular standard document exceeds the range of allowable rates will be presumed unreasonable.

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-318, MCA

 

            REASON: The proposed rule amendments make several changes to existing rule sections to bring the rule into accordance with current board practice. The most substantive of these are the amendments to (5) and (6).

            The amendment to (5) creates a legal standard for overcoming the presumptions created in this rule that particular rates will be deemed unreasonable. The board believes the clear and convincing evidence standard is justified in cases where a presumption established by rule that was promulgated in accordance with MAPA is being challenged. The "clear and convincing evidence standard" will provide the board with an articulable means of judging whether an owner or operator has produced sufficient cause to overcome these presumptions of unreasonableness embedded in the board's rules. The clear and convincing evidence standard is a familiar and well-established standard in Montana law, which should provide the board with explicit guidance in applying it. See, for example, 27-1-221(5), MCA: clear and convincing evidence is that "in which there is no serious or substantial doubt about the correctness of the conclusions drawn from the evidence. It is more than a preponderance of evidence but less than beyond a reasonable doubt." The Montana Supreme Court has also articulated the boundaries of this evidentiary standard on numerous occasions:

 

            Clear and convincing evidence is simply a requirement that a preponderance of the evidence be definite, clear, and convincing, or that a particular issue must be established by a preponderance of the evidence or by a clear preponderance of the proof. This requirement does not call for unanswerable or conclusive evidence. The quantity of proof, to be clear and convincing, is somewhere between the rule in ordinary civil cases and the requirement of criminal procedure--that is, it must be more than a mere preponderance but not beyond a reasonable doubt.

 

            In re A.J.W., 2010 MT 42, ¶ 15 (Mont. 2010)

 

            The proposed changes to (6) will make explicit the board's current business process of reimbursing consultant and contractor labor costs in accordance with the appropriate level of skill needed to perform a particular task, rather than by the education and experience level of the particular person that completed the task. In other words, (6) is intended to provide an objective standard for labor costs, regardless of title, position, education, training, or experience of the particular individual that did the work. The amendment of (6) is needed in order to avoid having to pay from the fund for inappropriately high skill levels or educational levels that are not needed to perform a particular corrective action task.

            Proposed new (7) establishes a method of determining reasonable cost levels for standard department work plans, reports, and standard board remediation tasks that is consistent with the board's current business process.

            Both the amendments to (6) and proposed new (7) are intended to formalize procedures by which the board may discharge its duty to ensure that eligible costs are reasonably incurred for preparation or implementation of department-approved corrective action plans before approving a reimbursement payment from the fund, as required by 75-11-309(3)(a), MCA. See also, 75-11-309(1)(g)(ii), MCA. ("The board shall review each claim and determine if the claims are actual, reasonable, and necessary costs of responding to the release and implementing the corrective action plan.")

 

            17.58.342 OTHER CHARGES ALLOWED OR DISALLOWED (1) The following types of charges are presumed eligible for reimbursement costs incurred in implementing a corrective action plan are presumed to be reasonably incurred:

            (a) through (e) remain the same.

            (f) lodging at actual cost unless excessive. Documentation supporting the cost (lodging invoice) is required. If no lodging invoice is provided, the reimbursement shall be at the rate of non-receiptable lodging facilities in accordance with 2-18-501(5), MCA;

            (g) through (i) remain the same.

            (j) sampling fees at $10 per sample, which includes bottle, ice, cooler, packing, and office-related handling charges.

            (2) The following list indicates, by way of example and not limitation, types of charges that are presumed not eligible for reimbursement to be reasonably incurred:

            (a) miscellaneous office postage, such as mailing of applications, reports, and correspondence;

            (b) through (i) remain the same.

            (j) markups by a person who serves the sole function of providing funding for a corrective action; and

            (k) charges incurred prior to release discovery date;

            (l) charges for preparation of board forms;

            (m) charges for preparation of department 30-day release report;

            (n) removal and disposal of petroleum, petroleum sludge, and other liquids from tanks;

            (o) removal of petroleum storage tanks required by underground storage tank rules or the International Fire Code; and

            (p) state permit fees for tank removal or system modifications.

            (3) The following may be eligible for reimbursement costs for implementing a corrective action plan are presumed to be reasonably incurred, only if approved by the board staff prior to claim submission:

            (a) remains the same.

            (b) access or trespass fees;

            (c) markups, not to exceed 7%, on subcontractor invoices when the subcontractor is furnishing labor (and incidental goods or supplies) on a project as part of the cleanup.  Proof of payment by the contractor to the subcontractor must be submitted prior to board approval or director approval, authorized under ARM 17.58.336(3).  The subcontractor markup may be reimbursable when the subcontractor's invoice and the evidence of subcontractor payment is on the same claim form as the markup.  Subcontractor markup is allowed only when the subcontracted work was preapproved in a corrective action plan; and

            (d) shipping of samples and equipment.

            (4) The Any presumptions made in (1) and (2) this rule may be overcome if specific circumstances warrant by presenting clear and convincing evidence to the board that the presumption should not apply, in accordance with the procedure set forth in ARM 17.58.336(6).

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-318, MCA

 

            REASON: The proposed amendments are consistent with current board practice and coordinate this rule with the proposed amended definition of "reasonably incurred." The proposed amendments are generally intended to formalize procedures by which the board may discharge its duty to ensure that eligible costs are reasonably incurred for preparation or implementation of department-approved corrective action plans before approving a reimbursement payment from the fund, as required by 75-11-309(3)(a), MCA. See also, 75-11-309(1)(g)(ii), MCA. ("The board shall review each claim and determine if the claims are actual, reasonable, and necessary costs of responding to the release and implementing the corrective action plan.")

            The board proposes to amend ARM 17.58.342(1)(f) to establish what rate will be reimbursed for lodging when no receipt is provided.

            The board proposes to amend (3)(c) in order to establish that the markup is to be requested concurrently with the subcontractor work. The board does not and should not reimburse the subcontractor markup if it provides all or partial funding to the contractor before the contractor pays the subcontractors. The program administered by the board is exclusively a reimbursement program. The statutes authorizing the board to make payments for eligible costs of implementing corrective action plans do not allow for prospective payment, only reimbursement of costs incurred.

            The proposed amendment to (4) creates a legal standard for overcoming the presumptions created in this rule that particular rates will be deemed reasonable or unreasonable. See Reason for amendments to ARM 17.58.341.

 

            17.58.343 REVIEW AND DETERMINATION OF THIRD-PARTY DAMAGE COSTS (1) through (4) remain the same.

            (5) An owner or operator dissatisfied with the denial or disallowance of all or any part of the claim may request a formal hearing. This request, with a specification of the grounds for disagreement with the board's decision, must be filed in writing with the board within 15 days of the receipt of the board's determination by the owner or operator. Upon receiving such request, the presiding officer of the board may appoint a hearing examiner to supervise any discovery and prehearing matters and to conduct the hearing, either at a subsequent meeting of the board or outside a board meeting, subject to 2-4-621, MCA, as the appointment may specify.

            (6) remains the same, but is renumbered (5).

 

            AUTH: 75-11-318, MCA

            IMP:  75-11-309, MCA

 

            REASON: This rule is proposed for amendment because (5) has been superseded by 75-11-309(4)(b), MCA (2009).

 

            4. The proposed new rule provides as follows:

 

            NEW RULE I REVIEW OF CORRECTIVE ACTION PLAN (1) The board staff shall review each corrective action plan and establish the allowable reimbursement for each corrective action in a corrective action plan budget.

            (2) Owners or operators or their representatives shall solicit at least three competitive bids for subcontractor corrective action work costing over $2500. The owner or operator shall submit documentation showing that at least three bids were solicited for the corrective action. Owners and operators must be reimbursed a reasonable amount for the time to prepare, solicit, and evaluate bids.

            (3) Corrective action plans that require the removal of petroleum storage tanks, dispensers, or product piping must be shown to be the most cost effective corrective action and the costs must be approved by the board in writing before the action is performed.

            (4) Corrective action plans that require the removal, repair, or replacement of building(s), sign(s), or canopies must be shown to be the most cost effective corrective action and the costs must be approved by the board in writing before the action is performed.

            (5) Owners or operators are responsible for determining whether it is more cost effective to purchase or lease remediation equipment necessary to remediate a petroleum release. Board staff may assist owners or operators in this evaluation.

            (6) Purchased remediation equipment, when no longer required to remediate the release, may be:

            (a) used on another site that the owner or operator owns, or for the owner's or operator's own purpose;

            (b) donated to the state of Montana. The state will then sell the equipment as surplus property. The proceeds of the sale will return to the fund; or

            (c) sold with the owner or operator retaining 50% of the sale price and 50% returning to the fund.

 

            AUTH: 75-11-318, MCA

            IMP: 75-11-318, MCA

 

            REASON: The new rule is consistent with current practices and clarifies other proposed rule amendments in this notice including, for example, a proposed new definition of "corrective action plan budget" and amended definitions of "actually incurred," "reasonably incurred," and "necessarily incurred."

            Section (2) is proposed because the board's current policy and practice is to require owners and operators, or authorized representatives of owners and operators, to obtain multiple bids for subcontractor work greater than or equal to $2500. The proposed rule formalizes policy and practice that has been in effect since November of 2002. In addition, (2) is proposed to establish that owners or operators may be reimbursed reasonable consultant costs for the preparation, solicitation, and evaluation of competitive bids that are an essential component of a corrective action plan.

            Proposed (3) and (4) reflect written policies of the board since January of 2000 and proposed (5) and (6) reflect written policies of the board since 1995.

            The new rule is necessary to formalize and simplify the board's procedure for discharging its duty to ensure that all eligible costs are actually, reasonably, and necessarily incurred for preparation of department-approved corrective action plans before approving a reimbursement payment from the fund, as required by 75-11-309(3)(a), MCA. See also 75-11-309(1)(g)(ii), MCA. ("The board shall review each claim and determine if the claims are actual, reasonable, and necessary costs of responding to the release and implementing the corrective action plan".)

 

            5. The rules proposed to be repealed are as follows:

 

            17.58.312 ELIGIBILITY REQUIREMENTS (AUTH: 75-11-318, MCA; IMP: 75-11-308, MCA), located at page 17-7038, Administrative Rules of Montana. This rule is being repealed because various legislative changes have simplified eligibility requirements in recent years, and the board was faced with the need to make substantial revisions to the rule to accommodate those changes or eliminate the rule altogether. Upon review, the board feels that the statutory provisions for eligibility are sufficiently clear at this point in time that no rule is needed to explicate them. The sole requirements for eligibility are set forth in 75-11-308, MCA, and the board feels that current definitions and ARM 17.58.326 provide sufficient guidance with respect to those requirements at this time.

 

            17.58.339 CORRECTIVE ACTION EXPENDITURES:  DOCUMENTATION (AUTH: 75-11-318, MCA; IMP, 75-11-309, MCA), located at page 17-7057, Administrative Rules of Montana. This rule is proposed for repeal because the language has been replaced with proposed language in ARM 17.58.334.

 

            6. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to Elois Johnson, Paralegal, Department of Environmental Quality, 1520 E. Sixth Avenue, P.O. Box 200901, Helena, Montana 59620-0901; faxed to (406) 444-4386; or e-mailed to ejohnson@mt.gov, no later than 5:00 p.m., February 10, 2011. To be guaranteed consideration, mailed comments must be postmarked on or before that date.

 

            7. Paul Johnson, attorney, has been designated to preside over and conduct the hearing.

 

            8. The board maintains electronic mail list-service system lists of interested persons who wish to receive notices of rulemaking actions proposed by this board. Persons who wish to have their name added to the electronic mail list-service system list may subscribe to one or more of the board interested parties lists using the link PETROstep1.mcpx and following the directions. If electronic mail is unavailable, persons who wish to receive notices by U.S. Postal Service mail shall make a written request that includes the name and mailing address of the person to receive rulemaking notices. Such written request may be mailed or delivered to Terry Wadsworth, Executive Director, Petroleum Tank Release Compensation Board, P.O. Box 200902, Helena, Montana 59620-0902; faxed to (406) 841-5091; or e-mailed to Terry Wadsworth at twadsworth@mt.gov or may be made by completing a request form at any rules hearing held by the board. Further information concerning the electronic mail list-service system can be found at http://deq.mt.gov/pet/OldNews/February 2008News.mcpx.

 

            9. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted on January 28, 2010, by telephone.

 

Reviewed by:                                                PETROLEUM TANK RELEASE

COMPENSATION BOARD

 

/s/ James M. Madden                      BY:      /s/ Roger Noble                                           

JAMES M. MADDEN                                   ROGER NOBLE, Presiding Officer

 

Certified to the Secretary of State January 3, 2011.

Home  |   Search  |   About Us  |   Contact Us  |   Help  |   Disclaimer  |   Privacy & Security